Prison relocation group has yet to request proposals for developing Point of the Mountain

The Utah State Prison is shown with housing developments in the background in Draper Wednesday, June 13, 2012.

They want to get their hands on this property. But the property value has gone down. It's not the gem it was a few years ago.—Scott Jenkins

SALT LAKE CITY — A group formed by the 2011 Legislature to draft a request for proposals to relocate the state prison from Point of the Mountain has yet to start writing.

"We've got plenty of time to do it," said Senate Majority Leader Scott Jenkins, R-Plain City, one of the legislative members of the Prison Relocation and Development Authority Committee, set to hold its monthly meeting Friday.

Jenkins, who has been designated by the committee as its spokesman, said the group is still getting up to speed on the details developers would have to address in a proposal to move the 61-year-old overcrowded prison, possibly to Tooele County.

Developers and governments eager to start collecting taxes on the land have long sought to free up the prison's more than 700 acres in Draper, considered a prime location for commercial and residential development.

"It's been a little tough to get a grasp on this thing," Jenkins said. "Really, what's driving this is they want to get their hands on this property. But the property value has gone down. It's not the gem it was a few years ago."

The latest look comes after a 2005 study ordered by then-Gov. Jon Huntsman Jr. found it would cost $461 million to move the prison, but the land was worth only as much as $93 million.

Steve Bogden, Coldwell Banker Commercial managing director, said after prices peaked around 2007 for undeveloped commercial property, it's now generally worth only about half as much.

"There's no question it needs to be done," Bogden said of moving the prison. "We think it's inevitable, but maybe not in the next 20 or 30 years."

This committee, which has been meeting monthly since January, has until mid-2014 to request and review proposals and to make a recommendation to the governor on the project.

Jenkins said it's going to take some time. "I do believe personally it will be a few months before we get down to writing the RFP (request for proposals)," he said.

But Al Mansell, a former state Senate president and real estate broker involved in the effort to fast-track the bidding process that sparked the legislation, said there's no time to waste.

"The urgency is that in order to really have a viable project, you've got to have low interest rates," Mansell said. "I hope you hurry so we don't lose those favorable interest rates and cost the state millions and millions of dollars. That's my only concern. I don’t have a concern about who does it."

Mansell, along with Salt Lake Chamber lobbyist Robin Riggs and former Utah Board of Pardons Chairman Michael Sibbett, had quietly pushed in 2010 for quick action on a prison move that likely would have limited competition for the project.

"It seemed to me like it was being rushed," said House Majority Whip Greg Hughes, R-Draper, sponsor of the bill creating the prison relocation committee. Hughes said he came up with the legislation in response to Mansell's effort.

Hughes said there are likely other developers, including private prison contractors, who might have ideas for making the move profitable. What he doesn't want to see is the committee taking no action now so a bid could be sought less publicly later.

"I have faith in this authority if they decide this is simply not the right time. But the cynic in me says don't have a procurement process as soon as this statute expires. That will raise red flags with me," he said.

Mansell said the past study showing the move would cost taxpayers $368 million was flawed because it did not take into account the tax revenues that the property could generate — or the economic development impact.

"There's a tremendous tax revenue opportunity there," he said, as well as the possibility of attracting large employers from outside Utah. "I believe the state can develop that with almost no additional cost if they do it the correct way."

He declined to describe the proposal he was trying to sell to Gov. Gary Herbert and other state and local leaders two years ago, but said it's still viable.

"That may seem a little strange when you're talking about such a large facility. But then you've got to step back and look at what the costs are going to be if we don’t move it," Mansell said.

Prison officials have long complained of not having enough money to repair the aging facility and add beds to keep up with the steady growth of inmates.

"I think it's past time to look at doing something with Draper. I cringe every time I think of investing more state resources in a location that is inevitably going to move," Sibbett said. "It's not a matter of is the prison going to move — it will. It's when."

Sibbett said the state's original prison was moved to Draper from Sugar House because of residential encroachment and overcrowding, the same arguments being made today for relocation.

He said while Tooele County has been viewed as the likeliest location for a new prison, there are other places that also would fit the bill. So far, the prison relocation committee has taken a field trip to just one site, Rush Valley in Tooele County.

Sibbett also declined to provide details of the proposal he and his partners hope to advance, other than it does not call for privatizing the state prison. "There's a place for privatization in many government services," he said. "I'm not sure a maximum security prison would be one of them."

He acknowledged they will have plenty of competition from other groups also hoping to develop the property. "It's prime real estate," Sibbett said. "We just want an opportunity to lay out what we think is a great solution."

Mansell said he has made no money from his involvement with Riggs and Sibbett, but would stand to profit if their proposal is the one selected by the state.

"No doubt some people see it as a way to get developers rich at taxpayers' expense. I see it just the opposite, actually," Mansell said. "I see it as the opportunity for this state to have a huge benefit and a bonanza over the next 20 years."

The Sandy real estate broker and former president of the National Association of Realtors did not sound optimistic about the relocation project ever getting under way.

"I'll probably be dead and gone by the time they do something," he said. "I think it hinges on whether we can get enough leadership to say, 'This is good, let's go.' Or if we're too timid."

Draper Mayor Darrell Smith was more upbeat.

"It's probably premature to say, 'You bet. I know that that's going to happen.' But I have a positive feeling going forward," Smith said. "I think there is a higher and better use."

For the city, a prison move will open up the possibility of collecting taxes on what's now state-owned land.

"As a whole, it would create a great opportunity not just for Draper City, but for Salt Lake County and the state," Smith said, adding that private developers would also benefit. "It's kind of like a gold mine."